Healthcare Realty Trust and Healthcare Trust of America, two of the largest US medical offices owners, have agreed to merge in a $17.6bn (€15.2bn) deal.

The NYSE-listed firms said they have entered into a “strategic business combination” to create a pure-play medical office building real estate investment trust (REIT).

As part of the deal, Healthcare Trust of America shareholders will receive $35.08 per share comprised of a special cash dividend of $4.82 per share. 

Pro forma for the transaction Healthcare Realty Trust and Healthcare Trust of America shareholders will own 39% and 61% of the combined company, respectively.

The companies said the combination creates a medical office building REIT with 727 properties totalling 44m sqft, making it the largest pure-play medical office buildings REIT.

The combined company, which will operate with the Healthcare Realty name, will have a pro forma equity market capitalisation of $11.6bn and a total enterprise value of $17.6bn.

In a joint statement, the companies said the merged company will be led by the Healthcare Realty management team, with Todd Meredith as president and CEO and Kris Douglas as executive VP and CFO. 

Knox Singleton, chairman of the Healthcare Realty board, will be chairman of the company and Brad Blair, chairman of the Healthcare Trust of America board, will be appointed vice-chairman.

Meredith said the combined company will have an “unmatched market scale in concentrated clusters, meaningful corporate and operational synergies”, and a larger development pipeline.

“We believe this transaction will be accretive through near term synergies with additional value from operational upside.

“It will also strengthen the combined balance sheet, enhance liquidity and improve access to capital. This combination provides a significant value creation opportunity for shareholders,” Meredith said.

Blair said: “This transaction is the culmination of a thorough strategic review process and we are pleased with the result for our shareholders, employees and tenants.

“We are confident this is the best path forward for Healthcare Trust of America.”

To read the latest edition of the latest IPE Real Assets magazine click here.

Topics